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GLOBAL MARKETS-China's return to work lifts local stocks while rest of Asia trails

Published 10/02/2020, 08:37
Updated 10/02/2020, 08:45
© Reuters.  GLOBAL MARKETS-China's return to work lifts local stocks while rest of Asia trails
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(Updates prices throughout, adds European and U.S. futures)

* Asian stock markets: https://tmsnrt.rs/2zpUAr4

* Asian shares fall after Friday's losses on Wall Street

* Chinese authorities make plans for businesses, schools to

reopen

By Swati Pandey

SYDNEY, Feb 10 (Reuters) - Asian shares fell on Monday as

the death toll from a coronavirus outbreak exceeded the SARS

epidemic of two decades ago, though Chinese shares gained as

authorities lifted some work and travel restrictions, helping

businesses to resume operations.

In early European trades, the pan-region Euro Stoxx 50

futures STXEc1 , German DAX futures FDXc1 and FTSE futures

FFIc1 all slipped 0.1% while U.S. stock futures were more

upbeat with e-minis for S&P 500 ESc1 adding 0.2%.

More than 900 people have so far died mainly in China's

central Hubei province as of Sunday with most of the new deaths

in the provincial capital of Wuhan, the epicentre of the

outbreak. To contain the spread, China's government had ordered

lockdowns, cancelled flights and shut schools in many cities.

But on Monday, workers began trickling back to offices and

factories though a large number of workplaces remain closed and

many white-collar workers will continue to work from home.

MSCI's broadest index of Asia-Pacific shares outside Japan

.MIAPJ0000PUS reversed some of its early losses but was still

down 0.4%. Japan's Nikkei .N225 was off 0.6%, South Korea's

KOSPI .KS11 was 0.5% weaker while Australia's benchmark index

.AXJO eased a shade.

China's indexes were the only ones in the black in Asia with

the blue-chip index .CSI300 adding 0.5% and Shanghai's SSE

Composite .SSEC up 0.3%.

"Markets have turned around a bit reflecting the news that

Chinese businesses were returning to work," said James McGlew,

analyst at stockbroker Argonaut.

"Overall, I think, there is still a concern out there that

the impact from the coronavirus hasn't been fully quantified,"

he added.

"Today's (easing of restrictions) seems to be more of a

symbolic gesture rather than the government actually being on

top of the situation with this virus."

The outbreak has killed more people than the SARS epidemic

did globally in 2002/2003. The virus has also spread to at least

27 countries and territories, infecting more than 330 people

overseas.

Over the weekend, an American hospitalised in the central

city of Wuhan became the first confirmed non-Chinese victim of

the virus. A Japanese man who also died there was another

suspected victim.

Monday's losses in Asia extended from Wall Street on Friday

where the Dow .DJI fell 0.9%, the S&P 500 .SPX declined 0.5%

while the Nasdaq .IXIC lost 0.5%.

"Expect markets to be sensitive to virus headlines. In this

environment, we favour defensive positioning," ANZ economists

wrote in a note.

China's central bank has taken a raft of measures to support

the economy, including reducing interest rates and flushing the

market with liquidity. From Monday, it will provide special

funds for banks to re-lend to businesses working to combat the

virus.

Despite the measures, analysts expect the world economy to

take a hit from an expected slowdown in China.

"For now, our best guess is that the economic disruption

related to the coronavirus will cost the world economy over $280

billion in the first quarter of this year," Capital Economics

said in a note on Friday.

"If we're right, then this will mean that global (economic

output) will not grow in q/q terms for the first time since

2009."

The virus has overshadowed other market news with

better-than-expected U.S. jobs data on Friday failing to lift

sentiment.

Non-farm payrolls increased by 225,000 jobs in January, with

employment at construction sites increasing by the most in a

year amid milder-than-normal temperatures, the Labor Department

said. Euro zone bond yields fell after German industrial output

tumbled in December to notch its biggest fall since January

2009, fanning concerns about the bloc's biggest economy.

The euro EUR= staged a half-hearted bounce from four-month

lows to be last at $1.0949.

The dollar reversed losses against the yen to be up 0.1% at

109.79. JPY=

The Australian dollar AUD=D3 , considered a liquid proxy

for China plays, also jumped 0.4% to $0.66975 after briefly

hitting an 11-year low of $0.6679. It fell 0.2% last week to

clock its sixth consecutive weekly loss.

That left the dollar index .DXY flat at 98.651.

In commodities, Brent crude LCOc1 futures eased 3 cents to

$54.44 a barrel while U.S. crude CLc1 futures was flat $50.3 a

barrel.

Since Jan. 17, oil prices have fallen by 14% while copper is

down around 10%.

U.S. gold futures GCv1 inched up slightly to $1,574 an

ounce.

Asia stock markets https://tmsnrt.rs/2zpUAr4

Asia-Pacific valuations https://tmsnrt.rs/2Dr2BQA

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